Go to Jeff Salisbury LWGate Home Page.From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: persfin-digest V5 #18
Date: Fri, 29 May 1998 22:59:12 -0400
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>I have two children - one is in high school, and the other is in college - and >I'm wondering about the "legalities" of starting IRA's for both of them. Each It's perfectly legal. There is no age limit (high or low) for contributing to a Roth IRA and you only have to be under age 70.5 to contribute to a regular IRA. As for income, the rules are that you can contribute the lesser of $2000 or your earned income. The contribution doesn't actually come from your income. It can come from anywhere. You just need to have earned income to be eligible to make contributions. I would recommend a Roth IRA. In all likelihood your kids are in a very low (possibly 0%) tax bracket, so there would be little benefit to the regular IRA deduction and the earnings in it would be taxed on withdrawal. With the Roth there would be no up-front deduction (which as I said would be minimal if at all) but all the withdrawals will be totally tax-free (assuming the account is open for at least 5 years and they are over 59.5 when they make withdrawals). Rich Carreiro rlcarr@animato.pn.com P5-100/RedHat Linux 4.1 - -
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